Articles for Volume Year 2018 Volume 30-1

This paper presents a brief survey of macroeconomic models of Nepal. It also empirically
investigates sectoral models of macroeconomic variables including inflation, monetary aggregate,
fiscal and external sector upon which policymakers' concern rests during the process of monetary
policy formulation. Sample period of 1975 to 2016 is used for the estimation. The Data Generating
Process (DGP) identified in this paper for the variables of interest meets necessary criteria both
from theory and empirical ground. These models are useful to understand general relationship
from sectoral perspective and to carryout simple forecasting for making monetary and other
macroeconomic policy decisions

Information on the pattern of money-price relationship is crucial for formulating appropriate
monetary policy and implementing it effectively. This paper re-examines the money-price
relationship in Nepal following a new methodological framework for time series data analysis.
Test results show that money supply significantly affects domestic price in Nepal. Indian inflation
is the major factor that has largest impact on the price situation in Nepal. However, exchange rate
is not found to be associated with the changes in price level in Nepal. Test results also show that
money-price relationship in Nepal has become much stronger in the recent times in terms of the
magnitude of impact.

The objective of the study is to examine the impact of exchange rate on trade deficit and foreign
exchange reserve in Nepal. The hypotheses of the study are: (a) there is no significant positive
association between nominal exchange rate and foreign exchange reserve and (b) there is no
significant relationship between nominal exchange rate of Nepalese rupee with US dollar and
trade deficit. As empirical analysis shows that one percentage point depreciation of the Nepalese
rupee (NPR) with respect to US dollar results in an (a) increase in reserve by 0.82 percentage
points and (b) decline in trade deficit by 0.75 percentage points, the null hypotheses are rejected,
thus suggesting that maintaining NPR undervalued with US dollar can improve trade deficit and
increase foreign exchange reserves. However, because of pegging with Indian currency, NPR
sometimes appreciates in line with Indian currency. This situation could be counterproductive for
improving trade deficit and increasing foreign exchange reserve of Nepal. In conclusion,
considering the external sector stability as one of the major policy objectives, exchange rate policy
can be fine-tuned to correct the trade deficit and maintain adequate foreign exchange reserve to
sustain imports and service external debt.

The most overarching and universally accepted imperative to federalize any unitary nation-state is
to reduce, both vertical and horizontal, fiscal imbalances as ensured availability of financial
resources only could augment any form of well-being and prosperity. Such imbalances constrict
all desirable economic outcomes. But, while carving seven States out of the erstwhile unitary state,
any other priority like identity or territoriality may have prevailed but fiscal imbalance. This study
shows that mainly vertical fiscal imbalance still alarmingly persists even after federalization of the
country. The Panel Corrected Standard Error (PCSE) model examines how these imbalances
between the federation and the sub-national units (vertical) and, also among the States
themselves(horizontal) are likely to impact on the fiscal federalism framework and its
functionality. It contends that highly skewed distribution and mobilization of financial resources
essentially defeats the very rationale of federalizing Nepal and, much debated identity
consideration in federalism has no positive welfare implication.

Work Family Conflict and Career Satisfaction in Banking Sector of Nepal[Jyoti Regmi Adhikary]

While a wealth of research has examined how work family conflict (WFC) affects negative work outcomes, there is limited research investigating the relationship of WFC with positive work outcomes. Using a sample of 381 Nepali banking professionals, this study examined the relationships of WFC with career satisfaction and social support. Study also explored how the socio demographic variables affected WFC, career satisfaction, and social support. Analyses indicated no statistically significant relationships of WFC with career satisfaction. Results also indicated association of social support from both work and family with increased career satisfaction. However, social support did not emerge as a significant moderator in the relationship between WFC and career satisfaction. In case of socio-demographic variables, only organizational grouping stood out as significant difference in the level of WFC experience among banking employees. This study has various theoretical and practical implications that are presented along with further research issues.